Transcript: SkyNews Lunchtime Agenda

Interview

WTC014/2015

20 May 2015

Topics: Coastal shipping reform, live cattle exports

David Lipson: We're going to press on with this issue about foreign shipping; Infrastructure Minister Warren Truss says the changes that government is planning on introducing are needed to deliver cheaper freight costs for business.

Warren Truss: Well Australia has a system that Labor introduced of Part A wages and Part B wages that are paid to Australian seamen doing voyages around the coast. We intend to apply the Part B wages to vessels that are engaged on the Australian shipping scene for 183 days or more.

These are the wages and the systems that Labor put in place in their legislation so, in fact, we are using their legislation, their pay rates. If they were considered to be good enough by the union when Labor introduced them, surely they're good enough now.

David Lipson: But it means that foreign ships who spend more than half a year in Australia will yes pay those higher wages but those ships that spend less than half a year in Australia will pay their workers lower wages. That's going to undercut some Australian shipping companies isn't it?

Warren Truss: Well under Labor's system, ships could undertake a number of voyages before they moved on to the part B wages system so these principles were established in the existing legislation. We want to ensure though that we have a domestic shipping industry in Australia. Currently we're reaching a situation where the shipping share of the transport task continues to slide.

It's predicted at a time when our trade and our transport task is going to go up by 80 per cent, shipping will only increase by 15 per cent. Now we need ships to be playing an increasing share of the load, not less. They've been on a constant slide because it has been uncompetitive.

It's not so much the volume of the wages that are being paid; it's the conditions and the circumstances under which they work. I don't know that many Australians are aware of the fact that Australian seamen get 25 weeks holiday a year and they get more time off for training and other allowances.

Under the Part B wages they'll still get about 14 weeks holiday a year but some of the extra allowances and awards for being woken up at night and issues like that will not be a part of that system.

Now Labor agreed to that when they were in government so it's hard for them to oppose now, in fact they introduced the legislation which was essentially drafted by the maritime unions.

David Lipson: But you want to change that legislation don't you and Labor claims that that will skew the playing field against Australian ships which will have to always pay their workers on those Part A system, the more generous pay and conditions that you mentioned there.

Warren Truss: Well we certainly proposed to change the permit system because Labor had introduced draconian measures in relation to the permits which meant essentially people could not apply for an single voyage permit, you had to apply for four and 12 months in advance and you had to give many days' notice to change any of those permits. They had made it a system which was designed to fail. It was designed to fail.

But when you're talking about taking work off Australian ships, we're reaching the stage where we have to say what Australian ships? Under Labor our coastal trading fleet has just been decimated. They've been unable to be competitive.

We want shipping to service Australian industry for every job that's been saved on an Australian ship and, frankly, not many have been saved… the numbers keep going down and down and down, we're losing jobs on the mainland because the reality is that Australian industry can't be competitive if it's got to meet some of these high costs of freight. So you have a situation where it's cheaper to bring sugar from Thailand into Melbourne than to take it from Mackay to Melbourne. It's cheaper to bring your cement in from China than to move the ingredients around the Australian coast, so none of it makes any sense.

Shipping has got to be seen as part of our general industry. As a part of our capacity to be competitive as a nation.

It should not just be a place for feather-bedding a handful of workers at the expense of other Australian employees. It's beyond question that the pay and conditions of Australian maritime workers are not in keeping with the pay and conditions of other Australian workers. They've been negotiated in perhaps times when the country may have been able to afford people to have 25 weeks holiday a year, but the reality is the cost of those benefits has been declining opportunities for industries on land and we want to have competitive land industries, we want shipping to play a much larger role in our national freight task and we can only do that if its cost structures are competitive.

David Lipson: Will this mean that Australian jobs or workers will have lesser conditions or even have their jobs at risk as some in the union have claimed?

Warren Truss: Well their jobs are at risk now because the shipping industry is in such a steep state of decline. The shipping industry has been going backwards now for decades but particularly over the last five or six years. We're trying to save jobs for Australian maritime workers. We need a competitive and effective Australian maritime industry. We want to train Australian seamen because we need them in our harbours; we need them in our coastal trade. I would love to see a return to the days when Australian ships are carrying our freight overseas; 99 per cent of Australia's trade is carried by ship and yet there are no Australian vessels involved. I would love to see them competitive again and my objective is to do what I can to achieve that but the first thing is to save an industry that [indistinct]…

David Lipson: [Talks over] But how will it help the Australian shipping industry if you are talking about actually giving the foreign ships the ability to offer lesser conditions and lower pay than the Australian ships? Won't the Australian ships, the ones that are left, be at a disadvantage here?

Warren Truss: Well, Australian ships can already, under the arrangements put in place by the previous government, have a different wage structure than those who are on international ships or those operating under the Part A arrangements. So that principle is already in place. We want to make it more workable so that, in fact, there can be Australian jobs on these vessels, bearing in mind that under our arrangements, the vessels that are here for 183 days or more will have to have Australian crew on board, they'll have to be paying Australian wages to those people and this will provide opportunities for Australian senior seamen to gain the skills that they need and to have command and senior positions on those vessels. So we are protecting jobs for Australian seamen. It is true that the make-up of some of the crews will be different, but at least there'll be Australian ships; there'll be ships trading around our coastal shores and playing a role in the freight task.

David Lipson: Can you quantify the benefits to Australian business? Will we see, for example, the price of goods that's transported from port to port in Australia come down?

Warren Truss: Well, I think that there is potential for that, because it will tend to make shipping more competitive and give them an opportunity to participate in some of the long distance freight hauls. Currently, because of these laws, you have international ships travelling between Australian ports not able to carry containers, even though there might be space on the ship, because they then have to pay Australian wages and conditions. So if we can take advantage of some of these vessels that are visiting our shores, well, then clearly that could have advantages also for consumers.

So the key thing is for us to maintain and to build—rebuild—a competitive Australian shipping industry; that's our first task, because we need ships, we need ships to participate in our freighting operations around Australia, otherwise you have to build a lot more roads, a lot more railway lines, you have ports that are not being fully occupied and bear in mind that a lot of this freight is actually moving to industries and factories and warehouses that are located close to the ports. It makes a lot of sense to use ships and, therefore, we do need to have a shipping industry that's competitive and able to play a proper role in our economy.

David Lipson: Just moving on briefly to live cattle; what's being done about claims that people in Vietnam have been slaughtering Australian cattle with sledgehammers?

Warren Truss: Well, I'm naturally concerned to hear claims of that nature. Any examples of animal cruelty, whether they be in this country or in other parts of the world, are abhorrent to Australians and I've got no doubt that the industry and the minister will be following up those issues to check whether there's any validity in the claims and if there is validity that we take necessary action to ensure that appropriate animal welfare standards are applied.

David Lipson: Deputy Prime Minister and Infrastructure Minister Warren Truss, thanks so much for your time.